N.J. Admin. Code § 14:9-10.4

Current through Register Vol. 56, No. 24, December 18, 2024

Section 14:9-10.4 - DSIC Foundational Filing

(a) The Board shall authorize the implementation of a DSIC by a water utility. Under the DSIC, the Board shall authorize a water utility to recover costs associated with DSIC-eligible projects through an approved DSIC rate.

(b) To obtain authorization to implement a DSIC, the water utility shall submit a Foundational Filing to the Board. Whether filed separately or concurrently with a base rate case, the water utility shall submit with the Foundational Filing, certain information, described below:

1. An engineering evaluation report of the water utility's distribution system that:

i. Identifies the rationale for the work needed to be accelerated for the water utility to properly sustain its water distribution network;

ii. Demonstrates that the plan proposed to accelerate the renewal of the distribution network is the most cost effective plan;

iii. To the extent that elements of the distribution network are failing, identifies what mechanisms are causing the failures; and

iv. Identifies what is being done to extend the life of the water utility's distribution network assets;

2. DSIC project information for the upcoming DSIC period that includes the following:

i. A list of projects, DSIC-eligible asset class, or category;

ii. A list of projects that were initiated under a prior Foundational Filing that were in-service, but not recovered in base rates as an eligible DSIC project or were not in-service at the time the DSIC rates were reset to zero pursuant to N.J.A.C. 14:9-10.6(c) and to which the utility will seek recovery of DSIC-eligible expenses under the new Foundational Filing;

iii. A list of projects placed in-service during a prior Foundational Filing and where previously unrecovered restoration costs may be sought in a current Foundational Filing;

iv. The nature, location, estimated duration of project work (including estimated in-service dates), and a description and reason for project necessity;

v. Aggregate information capturing blanket-type, DSIC-eligible infrastructure, to be rehabilitated or replaced (that is, number of valves, hydrants, or service lines) and the estimated annual cost of such blanket-type replacement programs;

vi. Vintage, condition, or other similarly relevant, reasonably available information about the eligible infrastructure that is being rehabilitated or replaced;

vii. Estimated project costs;

viii. Project identification numbers, so DSIC projects can be easily tracked; and

ix. Other such information, as is relevant and appropriate, in order to provide adequate information to make an informed decision regarding any given project; and

3. The expected amount of base spending for the water utility, including underlying detail adequate to document that the base spending has been made on the appropriate types of infrastructure including, a proposed DSIC assessment, calculated in accordance with N.J.A.C. 14:9-10.9 and work papers showing the detailed calculations supporting the proposed assessment schedule.

4. A public notice and hearing, at a minimum, are required in the DSIC Foundational Filing. The hearing notice shall include the maximum dollar amount allowable for recovery between rate cases, as well as an estimated rate impact for the entire period on customers.

5. After a Foundational Filing has been approved by the Board, a water utility may request that a different DSIC-eligible project be substituted for one already approved by the Board. The water utility shall submit written notice to the Board and the Division of Rate Counsel, identifying the project and detailing the reason(s) for the requested change, for approval prior to the planned initiation of the project through: a semi-annual DSIC filing or, if necessary, with at least 30 days prior notice. Unreimbursed utility relocation costs associated with relocations required by governmental entities, the details of which are not known or knowable at the time of the Foundational Filing shall be submitted as a substitution project.

6. A Foundational Filing may be filed concurrently with a base rate proceeding.

(c) No DSIC Foundational Filing shall be approved unless a water utility has had its base rates set by the Board within the past three years and any prior DSIC rate was reset to zero through the current, or prior, base rate case. A DSIC Foundational Filing may be approved concurrently with the setting of base rates. The Board has 120 days from the date of a complete filing or, if filed concurrent with a base rate case or during the pendency of a base rate case, until the effective date of the Board's approval of a base rate case, whichever is later, to act on the proposed DSIC Foundational Filing petition.

(d) When a water utility has its DSIC rate reset to zero, a new Foundational Filing must be approved before new DSIC investments and DSIC Rate recovery may occur.

(e) If within three years after the effective date of a Foundational Filing, a water utility has not filed a petition in accordance with the Board's rules for the setting of its base rates, all interim charges collected under the DSIC rate shall be deemed an over-recovery, and shall be credited to customers in accordance with this subchapter. A water utility may seek recovery of such projects in the ordinary course through its next base rate case. Notwithstanding the above, a water utility may continue to collect a DSIC charge during a pending rate case filed in accordance with this section.

N.J. Admin. Code § 14:9-10.4

Amended by 49 N.J.R. 2542(a), effective 8/7/2017